BENGALURU: Asian currencies were steady on Friday and poised for weekly gains after a phone call between US President Donald Trump and Chinese leader Xi Jinping signalled further trade talks, while most regional equities tracked Wall Street’s overnight losses.
In India, equities reversed course to rise 0.9% after the Reserve Bank of India delivered a larger-than-expected cut to its key repo rate and lowered the cash reserve ratio to bolster economic growth.
“The RBI may have decided to move quickly to a more appropriate policy rate level. A shift towards neutral stance means more rate cuts may be unlikely in the near-term,” Jeff Ng, Head of Asia Macro Strategy at SMBC, said.
The rupee inched up 0.1% to 85.74 per dollar.
Other regional currencies moved within a narrow band. The Thai baht and Singapore dollar were largely flat but were on track for weekly gains of 0.5% and 0.4%, respectively.
The Malaysian ringgit was up nearly 0.6% for the week.
MSCI’s index of emerging market currencies was flat after touching an all-time high on Thursday. The index is up 0.5% for the week.
The dollar index was little changed, after hitting a six-week low on Thursday, and was headed for a weekly loss of 0.5%.
Trump’s erratic tariff moves and a worsening US fiscal outlook have triggered a flight from the dollar, prompting analysts to expect most emerging market currencies will retain or build on their gains over the next six months.
In their closely watched hour-long phone call on Thursday, Xi pressed Trump to ease trade tensions that have rattled the global economy and warned against provocative moves on Taiwan, according to a summary released by the Chinese government.
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